‘So, what do you do?’, I get asked frequently. ‘Marketing revenue attribution’, I answer. What interests me that about a year ago I would get blank stares. Lately there’s been glimmers of recognition and an occasional, “Tell me more. What does that mean?”. I answer simply. Marketing revenue attribution means matching the amount of money spent on particular marketing tools to the amount of money it brought back.
Why revenue attribution matters?
Attribution is an important consideration since digital marketing is taking up a growing chunk of budget across all businesses. Huge amounts of money are being poured into interactive advertising – $76.6Billion for US alone by 2016. It can be viewed either as an expense or as an investment. In the latter case, one would ask, ‘what do I get in return to my investment’? Undoubtedly some return exists, but how to measure it when one is using so many different kinds of marketing channels? This is where revenue attribution comes in.
How does it work?
It is the process of assessing and mapping the specific marketing cost to the sales that are generated by that specific marketing channel. Therefore, revenue attribution gives an insight of which marketing tools and initiatives give the most in return. Knowing what works allows companies to allocate funds towards the channels and campaigns that are well received by customers, saving time and money of the company. Modern multi-channel revenue attribution models are very complicated and include processing of humongous amounts of data. It is important that it is done by experts. Otherwise companies are playing a guessing game with arbitrary numbers that can be misdirecting marketing spend, making ROAS even worse. Hence, if the wanted result is actual growth rather than blind expectations of growth, marketing revenue attribution is a way to go. At present and with perspective to a successful future.
Measure! Measure! Cut!
One of the things I hear from marketers or ecommerce professionals is ‘how busy they are!’ in putting out fires. Agencies mess up on creative content, the deadline for the campaigns slip, the new lightbox on their website is not showing up right on Firefox, etc.
So if I have to convince someone of the value of measuring the impact of their channels and campaigns, I have to help them first understand that this actually takes priority over their operational issues. I have trained as a woodworker and the one golden rule that is equally applicable in marketing is to measure twice before cutting. Knowing what’s working and what’s not goes a long way in prioritizing effort. Otherwise throwing time and money on a non-performing channel is a good way to misery.